Corporate treasurers have taken concrete actions to shore up their balance sheet investment portfolios following the regional banking crises in the US this year, according to new findings from Clearwater Analytics (CWAN).
In a poll of more than 150 corporate treasurers collectively representing over $1.5trn in assets under management (AUM), more than half of respondents said they have either increased the number of banks holding their cash and short-term investments or switched banks entirely in response to the regional banking turmoil earlier this year. Of these, about a quarter (22%) have shifted to larger banks, believing these to be more secure. Meanwhile, 49% of firms said they have reduced their exposure to banking sector debt.
The uncertainty surrounding regional banks is also feeding into where corporate investors want to see increased capabilities in their treasury management systems, which help treasurers manage liquidity, enhance returns and govern their portfolio. Improved cash management capabilities topped the list of priorities for respondents, with a considerable 58% viewing this as a key priority.
“After three years of market fluctuations, the first half of 2023 has been anything but a return to normal for corporate treasurers and the corporate liquidity market,” said Scott Erickson, Chief Revenue Officer at Clearwater Analytics.
“The banking challenges that unfolded during the first half of 2023 are still creating ripples around the financial world,” reflected Cody Lott, Head of Corporates and REITS at Clearwater Analytics. “And with that, many financial teams have been forced to take a long hard look at their banking and investment management strategies and will likely continue to do so for the rest of the year.”